New Deal for Consumers: European collective redress on the way
In December, we discussed the possibility that in 2018 the European Commission would adopt consumer collective redress rules in every EU member states. The Commission will soon publish its New Deal for Consumers that will propose a revision of the current EU consumer directives. This is partly in response to several mass-harm cases, such as the 2015 diesel emissions issue, the 2017 mass flight cancellations and the more recent France baby milk contamination.
In this context, the report published on 26 January by the European Commission is looking at the progresses made by Member States on the implementation of collective redress measures following the Commission’s 2013 Recommendation.
The report concludes a limited follow-up to the Recommendation with only three Member States (Belgium, Latvia and Slovenia) having adopted collective redress rules after 2013. Nine Member States do not yet offer an opportunity for consumers to jointly claim reparation in mass harm situations.
In 2013, FERMA welcomed the Commission recommendation on collective redress but argued against the introduction of US-style class action legislation on the basis that it would introduce complex, lengthy and costly procedures. FERMA continues to advocate a European model of collective redress that contains safeguards against abusive litigation including a loser-pays principle and prohibition of punitive damages.
FERMA members believe that out-of-court settlement will always be preferable for consumers and companies, and that disputes should go through an escalating pyramid with an emphasis on customer relationship management and mediation or arbitration.